AIR Estimates Windstorm Xynthia Insured Losses at $2 to $4.1 Billion

Catastrophe risk modeling firm AIR Worldwide has estimated that insured losses in France, Belgium, Germany, and Netherlands from winter storm Xynthia will be between €1.5 billion and €3 billion [$2 to $4.1 billion]. The storm struck the Atlantic coast of Western Europe on Saturday February 27th, in the northern provinces of Spain and Portugal. It then moved northeast over the Biscayan Sea into central France before losing intensity on its path through Germany and eventually dissipating over the Baltic Sea. [See IJ web site – http://www.insurancejournal.com/news/international/2010/03/01/107736.htm ]

“Xynthia brought with it a potent combination of hurricane-force gusts and torrential rains, causing property damage across parts of Spain, France, Belgium, and Germany,” explained Dr. Peter Dailey, director of atmospheric science at AIR Worldwide.

“Within the last two weeks, a cluster of three winter storms—Undine, Wera and Xynthia—moved into Europe only a few days apart, and each of them tracked along a strong southerly jet stream across a region north of the Canary Islands,” he added. “Among the three storms, meteorological conditions were most favorable for Xynthia’s development because the storm formed farther south than the other two and therefore was able to tap into an unusually warm and moist air mass. Enhancing the amount of available moisture for Xynthia was the presence of unseasonably warm sea surface temperatures of 14 degrees Celsius [57.2°F].”

Dr. Dailey contrasted Xynthia with other storms, notably Lothar and Martin in 1999 and with Klaus, which struck southern France last year. He noted, however, that the “wind speeds of Xynthia were generally not as intense as any of these storms. In fact, Xynthia’s wind speeds were closer to those of Herta, which was one of a devastating series of storms that affected Europe over a five-week period in the winter of 1990, though Herta tracked over a region with a somewhat higher density of properties. Observed losses for Herta are about €2.3 billion [$3.14 billion] trended to today’s exposure.”

France was the hardest hit by Xynthia, with the storm uprooting trees, flooding houses, and wreaking havoc with transportation. “Unreinforced masonry construction is common throughout France,” Dr. Dailey observed. “At the wind speeds recorded for winter storm Xynthia, AIR engineers expect damage to be restricted to the outer shell of a building including roof tiles, chimneys, and windows. Some structural damage may be observed in older buildings with poor construction quality.”

In addition AIR pointed out that “many of France’s sea walls, including those around the Il de Re, were damaged or washed away. With the combination of high tide and strong winds, the storm increased sea levels to over a meter [3.1 feet] above normal and generated waves as high as 8 meters [app.25 feet] in the Vendee and Charente-Maritime regions. While the storm has subsided, high tides continue to threaten areas where high sea surges have already breached dikes along the coast.

AIR noted that its industry insured loss estimates reflect: “Insured physical damage to property (residential, commercial, industrial, auto), both structures and their contents.” They do not include: Business interruption and additional living expenses (ALE) for residential claims; losses to forestry; losses to infrastructure, nor losses from non-modeled perils, including coastal surge and inland flooding.

“While the size of individual claims is expected to be relatively low, the overall volume of claims is expected to be significant due to the size of the affected area. Flood and coastal storm surge losses will likely be substantial,” the bulletin concluded.